When your water heater suddenly stops working, the first thing that hits—besides the cold water—is the cost. You’re staring at a hefty plumbing bill, wondering if your home insurance might cover the damage. It’s a fair question, especially since these types of breakdowns often happen with no warning.
Unfortunately, most homeowners don’t realize until they file a claim that standard insurance policies don’t cover everything. Specifically, mechanical breakdown and wear and tear are among the most common exclusions in a home insurance policy. That means if your water heater breaks because it’s old or simply failed, the repair or replacement cost likely falls on you.
In this article, we’ll break down what these exclusions actually mean, explain when water damage is covered, and outline the exact steps you should take if you think you might have a claim.
What Is a Mechanical Breakdown Exclusion in Insurance?
Most standard homeowners insurance policies exclude coverage for mechanical breakdown. That means if a part inside your water heater fails, the unit stops functioning, or the problem is due to internal wear, your policy will not pay for the repair or replacement.
This kind of exclusion is based on the principle that appliances and systems naturally age and deteriorate over time. Insurance is designed to cover sudden and accidental damage, not the eventual failure of things we expect to wear out.
What About Wear and Tear?
Wear and tear is another common exclusion. It refers to the expected deterioration of appliances and home systems through normal use. If your water heater stops working because it’s ten years old and a component wore out, that’s considered wear and tear—and your policy won’t help.
It’s frustrating, but it’s also standard practice across nearly all homeowners policies. These exclusions are clearly outlined in the fine print, which most people don’t read until there’s a problem.
When Is Water Damage Covered?
There’s a key distinction to understand: while your insurance won’t cover the broken water heater itself, it might cover the resulting damage if water escaped and caused harm to your home or belongings.
If the broken heater leaked and damaged your:
- Floors or carpeting
- Walls, ceilings, or baseboards
- Furniture or electronics
- Personal belongings stored nearby
…then you may have a valid water damage claim under your policy’s “sudden and accidental discharge of water” clause. You would still be responsible for your policy’s deductible, but the damage could be covered.
It’s important to act quickly. The longer you wait, the more likely your insurer may argue the damage was due to neglect or delayed maintenance.
What Should You Do If You Think You Have a Claim?
To give yourself the best chance of claim approval, take these steps immediately:
- Photograph all visible damage — floors, walls, belongings.
- Create an inventory list — include descriptions, values, and purchase dates of all affected items.
- Locate receipts, manuals, or original product documentation if available.
- Keep a written journal of events — when the water heater failed, when you discovered the damage, who you spoke with, and what was said.
This kind of documentation is crucial. It helps your insurance adjuster understand the scope of the loss and strengthens your claim file.
What Does It All Mean for Homeowners?
Here’s the short version:
- ✅ Covered: Damage caused by escaping water (flooded floors, ruined belongings)
- ❌ Not covered: The broken water heater itself or any repairs related to age or wear
Always read your insurance policy carefully, or talk with your agent to clarify what’s included. If you aren’t sure whether you’re covered, it’s better to ask early than find out too late.
Conclusion: Know the Limits—And Your Next Move
Most homeowners only learn about exclusions like mechanical breakdown and wear and tear after a problem happens—and by then, it’s already too late to prevent out-of-pocket expenses. Your policy likely won’t cover the failed water heater, but if it caused water damage, that part of the loss may still be covered.
Now that you understand how these exclusions work, your next step is to document everything thoroughly and contact your insurer to report the loss. Being prepared could make the difference between a denied claim and a check that helps you recover.
If you’re unsure about what qualifies or how to navigate the claim process, we’re here to help. Our team has been helping homeowners and businesses for over 45 years and we have seen it all and can walk you through your options. Our team can be reached via a call to 617-298-0655, a text to 617-409-0329 or an email to customerservice@vargasinsurance.com
Want to be fully prepared before filing a claim?
Check out: “How to File An Insurance Claim Like A Pro”
